"[RBS CEO] Ross McEwan is always insisting there is a good bank
inside, struggling to get out and there is some truth in that,"
he said in the radio
interview.

He highlighted how profit before tax of was at £421
million in the first quarter.

However he warned that "overall, the picture is
disconcerting" for RBS.

"Yesterday [Thursday], RBS shocked the City of London by
admitting that the plan to demerge Williams & Glyn, which
isn't really a separate bank because it has been part of RBS
since the 1980s, has basically hit some serious obstacles. I hear
from insiders that the process in separating it is a disaster
area," he said.

"The original bidder for W&G — Santander — withdrew
from the offer. It was rumoured that its IT was inadequate and
'medieval.' I think the issue with W&G is a microcosm of the
problems [RBS] is having."

Around seven years ago, RBS had to beg the government for a
bailout. Over the course of 2008 and 2009 it borrowed £45.4
billion ($70.1 billion), worth 500p per share, from the taxpayer
and it has yet to pay it back. Under the terms of its deal with
the EU, RBS has to hive off W&G, just like Lloyds did with
the sale of retail unit TSB.

Fraser said that hiving off W&G is "highly complex" due
to the challenger bank being within the retail bank at RBS and
the "archaic" IT systems are causing problems for the entire
bank, not just W&G.

RBS said in its results on Friday that it will
be spending a lot more than an originally planned £1.7 billion on
upgrading its technology. In 2013, millions
of customers were left unable to pay for goods
and services or receive funds into their accounts, in the run-up
to Christmas that year, due to a massive IT glitch.

But overall, Fraser rated RBS CEO Ross McEwan as "6
out of 10" for doing his job.

"I think one of McEwan's key goals is to get RBS to be the
most trusted bank by 2020 — I would argue that he would struggle
to do that. However, given the mess he inherited, he's doing a 6
out of 10 job," said Fraser.